August 27, 2008
Foreclosure fallout: Renters are likely being hurt by a growing share of foreclosures ending up back in the laps of lenders and headed for auction.
A new Woodstock Institute study shows that number of foreclosure filings going to auction in Cook, DuPage, Will, Kane and McHenry Counties climbed 98 percent between 2006 and 2007. And by 2007, 94 percent of Chicago-area auctions went to the foreclosing lender, up from 70 percent in 2005, instead of outside investors.
A growing share of foreclosure auctions in the city of Chicago are for small, multiunit buildings. In 2007, these types of properties, with two to six units, accounted for 36.5 percent of foreclosure auctions in the city, up from less than 30 percent in 2005.
Those numbers are worrisome because many lender-owned properties are vacant.
"Lenders, investors and servicers have repeatedly stated that they have no interest in being landlords," said Geoff Smith, Woodstock vice president and study author. "It’s safe to assume that these properties have been taken off the market, reducing the available rental housing stock."
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